OIG and CMS Issue Rule: Finalizing Fraud and Abuse Waivers for MSSP ACOs

The Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) of the Department of Health and Human Services just issued a final rule setting forth waivers of specified fraud and abuse laws applicable to the Medicare Shared Savings Program (MSSP). The final rule replaces the Interim Final Rule (IFC) with comment (IFC) that was issued on November 2, 2011. The IFC had been set to expire on November 2, 2015; the final rule is effective immediately and does not expire.

The final rule predominately continues the waivers contained in the IFC. One change is that the final rule eliminates the waiver of the Gainsharing Civil Monetary Penalty Law (Gainsharing CMP), which law (found at 42 U.S.C. 1320, 7a(b)(1) and (2)) makes it illegal for hospitals to knowingly make payments directly or indirectly, to induce a physician to reduce or limit medically necessary services to Medicare or state health program beneficiaries under the physician’s direct care. The IFC had created a waiver at a time when the “medically necessary” language was not included in the Gainsharing CMP statute and the wavier had protected arrangements only so long as services not medically necessary were involved. Since the Gainsharing CMP statute has now been amended to add “medically necessary” services to the text, the Gainsharing CMP waiver was viewed as no longer needed.

The other revisions to the IFC in the final rule are less substantive. They include:

• Changing “should” to “must” in the fourth condition to Pre-Participation and Participation Waivers. This change will now require an ACO’s governing body’s documentation of its authorization of an arrangement to provide the basis for the determination that the arrangement is reasonably related to the purposes of the MSSP.
• Clarifying what “home health supplier” means under the IFC. Home health suppliers are not eligible for waiver protection under the Pre-Participation Waiver, which generally applies to start-up arrangements. The final rule clarifies that a home health supplier is an entity that is primarily engaged in furnishing home health care services.

With the final rule, there will be five applicable waivers from the covered fraud and abuse laws for MSSP ACOs. The waivers are:

• ACO Pre-Participation Waiver
• ACO Participation Waiver
• Shared Servicing Distribution Waiver
• Compliance with Physician Self-Referral Law Waiver
• Patient Incentive (Beneficiary Inducement) Waiver

The waivers provide MSSP ACOs and their participants with broad protection against specified fraud and abuse laws if all the conditions to the waivers are met. The conditions, however, must be satisfied and documented as required. There had been some concern that the waivers may be limited in some particulars in the final rule, but CMS and OIG have determined that the included conditions provide adequate safeguards, and that the waivers are important to the functioning of ACOs participating in the MSSP.